What are the Taxation rules of Equity Funds?

What are the Taxation rules of Equity Funds

One thing that comes to every investor’s mind apart from the return and related risk is the associated tax compliances. The last time we checked 2 types of taxes were applicable on sale of mutual funds i.e. capital gains (under Income Tax Act) and dividend distribution tax (DDT). 

Capital Gains

If any investor holds a mutual funds unit of the scheme for a period of up to one year, provisions of short-term capital gain (STCG) are applicable on the sales proceeds. The applicable tax rate on such securities is 15%. So, if you have a unit of mutual funds that you sell within a year, you are liable to pay 15% as tax of the capital gain on sale proceeds for that financial year. 

However, if the investor holds the units of the mutual fund scheme for a period exceeding one year, then the capital gains earned by you are called long-term capital gains (LTCG). LTCG above Rs.1 lakh is taxed at 10% without indexation benefits.

Dividend Distribution Tax (DDT)

On mutual funds, dividend distribution tax is applicable at 10%. Dividend distribution tax is applicable on dividend receipts. This amount is taxable in the hands of the corporates. The corporates deduct the dividend distribution tax before giving any dividends to its investors. The investors do not have to pay anything as it has been already deducted. Therefore, there is no need for investors to pay additional dividend distribution tax on dividends received on their investment. 


It could be concluded that on a mutual funds unit held for 1 year or less, the applicable tax rate is 15% on total gain. Whereas, in cases where mutual funds have been held for more than 1 year, a tax rate of 10% is applicable on total gains. Also, dividend distribution tax is applicable at 10% which is automatically deducted from the dividends and paid by the corporates.

How to Save Money For a Child’s College Education

Save Money For a Child's College Education

Education is one the most powerful weapons in today’s competitive world. We live in an environment where change is constant. Education prepares us for coping with these changes around us. In simple words education is the quality of one’s life; how a person lives, talks and treats others around him/her.

A Good education is important for all of us. A proper education usually involves huge sums of school, college and tuition fees. Good education never comes free. Just like money is important for our day to day needs, similarly, money is very important for higher education. Not only knowledge, but values and moral habits too comes with our learning. For a rich and highly esteemed family, it is easy to spend money, but for an average middle-class family, it is important to maintain a proper system of their income and spending.

If you are a new parent, your child is young, it is beneficial to start saving for your child’s college education from today. This will not only reduce your burden in the future but will also be healthy for your expenditures. In many Indian families, it is often seen that the parents are not very highly educated but they want to make their children do well. But due to less income, they can’t afford the fees of the colleges. For such conditions, the loan facility is becoming common nowadays. Most Indian families face financial problems in regard to their child’s education, this problem is overcome due to loan facility, which is beneficial for the parents as well as children. However, the interest rates on such loans are very high which puts a big burden on the shoulders of the children and their families. 

If you are aiming to make your children study in a well-known institute, the best way is to start early savings. As early as you will start to save the better it will be. Ideally, you should start when your child is born. Even small savings each much can help a lot. Also, it is important to invest in assets and get a great return. Mutual funds are the best option for investing your money. Long-term investments are generally time-consuming but are worth your money and time. Proper investment and high returns are the essential steps towards your child’s dream. In between the savings and expenditures, don’t make it complicated that it leads to loss of your major part of income. We can help to formulate a plan by giving the best advice that will protect your income from the loss and will give you a better version of savings for your child’s college education.

According to the experts, if you have 12 to 15 years for your child’s college education, equity funds are the best option. Also, one of the effective ways to save for your child’s education and future is to create a savings account for your child and start depositing the amount regularly. It will be an easy and convenient way of saving for your child’s future. There are certain children’s education plans which guide you with what to do and how to save your money for educating your children.

Having a good and pre-planned child education policy can also be helpful for you and your children. Every parent wants a safe and secure future for their children. A bright future is not possible without the light of education and knowledge. Make your child’s education your first priority, control some not-so-important expenditures and put those in your child’s education savings.

Financial mentor like ourselves will give you a well-planned estimation providing you the best advice that will be helpful for you as well as beneficial for your future. Income, expenditure, and savings, balancing these three can make your present and future on track.

Education is a light that guides your future but doesn’t come without a cost. Making this cost worth spending, your aim should only be on acquiring education. At an early age, during school days children start to build their dreams. The fulfillment of these dreams depends upon his/her higher education so you can’t compromise regarding education. Your child’s dreams are precious, make them come true by saving accurately for your children’s college education because education needs no compromise so every parent needs to save for their children.

How Much Should a Couple Save For Retirement ?

How Much Should a Couple Save For Retirement

Retirement means a permanent leave from a particular job or a working place. At a young age when you are doing any job or work, you earn income which is satisfactory over your expenses and lifestyle. On the other hand, life after retirement is not exactly a joy ride. Not only do you have to change your lifestyle but also have to balance your expenses and needs. In your early year when you save some part of taxable income, these savings will surely help you in your future. Most of you can’t judge how much to save your income for future use. Some experts suggest that one should invest at least 15-20% of their monthly income towards retirement funds. For working couples, mutual decisions and understanding play an important role to decide the lifestyle after retirement.

Couples planning for retirement have to face certain challenges at their age. It is said that at the age of 40 you make real money. Making decisions regarding your money is not easy. There are certainties, possibilities, and also uncertainties. Retirement requires balancing between these. Your lifestyle portrays the estimation of money that you will need. Try to save 15% of your income per year. Keep that as your ‘savings for retirement’. Retirement involves a combination of personal planning and financial planning.  Retirement planning includes calculation of expenses, identifying the income sources, and programming the savings. 

The process of retirement planning can be held by the professionals called retirement planner by the national association of personal financial coach. You can approach an experienced retirement planner such as ourselves. Also, there is a retirement calculator that can help you in estimating how much money you need before retirement and how to make plans for it. It is easy when you have to plan a retirement as an individual but is a little difficult couple. This is because you both differ in spending, needs, income. There are certain points which must be crystal clear between you both, like-

“How you want to spend the rest of your life after retirement?”

“where you want to live after retirement?”.

“What you want to do after we get to retire?”

Being a working couple and planning to retire, you must plan the spending and prepare a budget for your upcoming life probably after retirement. The option for you is the retirement planner. A retirement planner will help you in the ways you could never plan. Retirement planning must be efficient and worth executing, which can be done by a planner.

Considering the age and health difference one of you may live longer than the other, keeping all these points under consideration, one must plan for the retirement. When it comes to a well-planned future after retirement, you should always take some good advice from a professional i.e., retirement planning advisor. A retirement planning advisor gives you a piece of suitable and effective advice regarding your plans, expenses, savings, and income.

Keeping his advice in mind, you can put up your requirements, needs, and other relevant details in Infront of the retirement planner. keeping in mind all your points, he will formulate a perfect plan for your future (life after retirement). For a working couple, best way to secure their futures are investment and assets. One should invest in money plans and long term-investments.

Keeping some part of your income for investment will be beneficial. Investments are long term as well as short term. Long term investments are mostly beneficial. Investing in funds and policies will give you a satisfactory result after a certain point in time. With the growing age, consciousness regarding health rises. Your saving and investment can come at the time of a health emergency.

Consulting with a retirement planner will reduce your stress as planning is the first step of every activity we do. Making a complete retirement plan will give you a clear vision of your life before and after retirement. The Future is uncertain and unpredictable so we should always be ready for the challenges. Life after retirement is much more tough and full of challenges. Retirement planning, planners, and advisors make your future bright and also less stressful, leading a well-planned life after retirement.

The Complete Beginner Guide to Budgeting

Beginner Guide to Budgeting

In today’s fast-paced world, managing your finances has become more crucial than ever. Whether you’re looking to save for a dream vacation, pay off debts, or simply gain a better understanding of your spending habits, creating a budget is the foundation of financial success. If you’re new to budgeting, fear not! This informative and human-friendly guide will walk you through the basics of budgeting and help you get started on your journey towards financial stability.

Understanding the Basics of Budgeting

Budgeting is essentially a plan for your money. It’s a tool that helps you allocate your income to various expenses and financial goals, ensuring that you have a clear overview of where your money is going. The ultimate goal of budgeting is to spend less than you earn and make intentional choices about your financial priorities.

Creating Your Monthly Budget

  1. Calculate Your Income: Begin by determining your total monthly income. This includes your salary, any side gig earnings, and other sources of income. This step will give you a clear picture of how much money you have to work with.
  2. List Your Expenses: Make a list of all your monthly expenses. Categorize them into fixed expenses (e.g., rent/mortgage, utilities, insurance) and variable expenses (e.g., groceries, entertainment, dining out). Don’t forget to include periodic expenses such as annual subscriptions or quarterly bills.
  3. Set Financial Goals: Define your short-term and long-term financial goals. Whether it’s building an emergency fund, paying off debt, or saving for a major purchase, having specific goals will guide your budgeting decisions.
  4. Allocate Funds: Distribute your income to cover your expenses and contribute to your financial goals. Start by covering your fixed expenses and then allocate funds for variable expenses. Be sure to prioritize your goals during this step.

Practical Budgeting Tips for Beginners

  1. Be Realistic: When creating your budget, be realistic about your income and expenses. Overestimating your income or underestimating your expenses can lead to frustration and failure.
  2. Track Every Expense: Keep track of every penny you spend. This will help you identify areas where you might be overspending and make necessary adjustments.
  3. Emergency Fund: Always allocate a portion of your budget to an emergency fund. Life is unpredictable, and having a financial cushion will prevent you from derailing your budget in case of unexpected expenses.
  4. Review and Adjust: Your budget isn’t set in stone. Regularly review your budget to ensure you’re staying on track and making progress toward your goals. Adjustments might be necessary as your circumstances change.
  5. Use Technology: Take advantage of budgeting apps and tools that can simplify the process. Many apps categorize your expenses automatically and provide visual representations of your spending patterns.
  6. Stay Disciplined: Budgeting requires discipline and commitment. Stay focused on your financial goals, and remind yourself of the rewards that come with responsible money management.

In conclusion, budgeting is a powerful tool that can help you take control of your finances and work towards a more secure financial future. By understanding the basics of budgeting, creating a well-structured monthly budget, and following practical tips for beginners, you’ll be well on your way to achieving your financial goals. Remember, the key is consistency and a willingness to adapt as your financial situation evolves. Happy budgeting!

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